Australian Stock Market Report – Morning June 24, 2014

In US economic data, the Markit ´´flash´´ manufacturing purchasing manager's index rose from 56.4 to 57.5 in June, above forecasts near 56.5. Existing home sales rose by 4.9% to a 4.89 million annual rate in May, above forecasts of 4.73m. And the national activity index rose from minus 0.15 points to +0.21 points in May.

European shares eased from near 6-1/2 year highs on Monday with the FTSEurofirst 300 index falling by 0.5%. The German Dax lost 0.7% while the UK FTSE eased by 0.4%. The latest ´´flash´´ readings on Eurozone activity disappointed investors. But Australia´s major miners finished up in London trade in response to higher base metal and iron ore prices with shares in BHP Billiton up by 1.9% while Rio Tinto lifted by 1.6%.

US sharemarkets ended little-changed in light trade on Monday. Homebuilding stocks rose in response to a sharp rise in existing home sales. And other economic data was positive. But investors were generally content to digest recent sharemarket gains in the record-breaking run. The Dow Jones fell by 10 points or 0.1% with the S&P 500 index down by less than 0.1% while the Nasdaq rose by less than 0.1%.

US long-term treasury prices were flat ahead of new bond supply to be issued over the week. And while economic data was firmer-than-expected, the sharemarket eased modestly. US Treasury will sell $94 billion in new debt this week, including $30 billion in two-year notes on Tuesday, $35 billion in five-year notes on Wednesday and $29 billion in seven-year notes on Thursday. US 2 year yields were flat near 0.46% while US 10 year yields were up by 1 point to 2.62%.

Major currencies were mixed against the US dollar in European and US trade on Monday. The Euro eased from highs near U$1.3610 to lows near US$1.3575, and closed US trade around US$1.3600. The Aussie dollar eased from highs near US94.40c to lows near US94.05c and ended US trade around US94.15c. And the Japanese yen held between 101.80 yen per US dollar and JPY101.95, ending US trade near JPY101.90.

World oil prices fell on Monday on reduced fears about a reduction of global oil supplies emanating from the Iraq crisis. Latest data showed that oil exports from Iraq in June were near record rates of 2.53 million barrels per day. Reuters reports that ´´Iraq ships 90% of its crude exports from southern terminals, which are far from the Sunni insurgency.´´ Brent crude fell by US69c or 0.6% to US$114.12 a barrel while US Nymex closed lower by US66c or 0.6% to US$106.17 a barrel.

Base metal prices rose by up to 2.2% on the London Metal Exchange on Monday. with lead rising the most. But tin bucked the trend, down 0.1%. The Comex gold futures quote rose by US$1.80 an ounce or 0.1% to US$1,318.40 per ounce. Iron ore rose by US$1.30 a tonne or 1.4% on Monday to US$93.40 a tonne.

Ahead: In Australia, no major economic data is scheduled. In the US, the S&P/CaseShiller home price series is released with FHFA home prices, consumer confidence, new home sales, Richmond Federal Reserve index and weekly chain store sales.